Deutsche Bank recently closed its last retail business branch in China, following in the steps of Royal Bank of Scotland, which made a similar move earlier this year.

In China, private banks' clients - the majority of whom belong to the so-called "first generation" who created their own wealth - are more sophisticated and private banks need to shift their services from traditional asset investment to financial planning and wealth solutions advice, Leung said.

Despite the rebound of global wealth to around pre-2008 levels, Asia-Pacific's wealth management industry is facing significant margin pressure caused by increasingly stringent and costly regulatory requirements, uneven growth across geographic markets and subdued client activity. These dynamics are further compounded by shifting demographics and existing challenges around operations, technology and talent management.

Yet there's still potential for development: As Asia's population ages, preparing for retirement, enjoying accumulated wealth and the planning for business transitions will become increasingly important, Zhou said, adding that there is still a large gap in competency levels of advisers to engage clients in philanthropy support, tax planning and specialist collection.

"Tailored client servicing ought to be considered to capture more market share. As global and regional private banks target the China market for their new clients, China's private banks need to equip themselves to compete," said Leung.

While continuing to invest in technology infrastructure to achieve efficient processes and sophisticated technical platforms, private banks are being advised to consider sharing back-office functions and creating a center of process excellence to maintain costs and improve efficiency.